This New Zealand report will address the factors that are likely to affect exchange rates today if you are buying abroad or making a currency transfer. The table below shows the difference in USD you would have achieved when buying £200,000.00 during the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
The New Zealand Dollar is currently close to the lowest levels seen against the Pound since the Referendum vote in June 2016, and has provided our clients purchasing NZD with GBP with a fantastic opportunity to take advantage of. A NZD $250,000 purchase is over £6,000 cheaper now compared to just 10 days ago, and demonstrates the importance of being in contact with your dedicated broker to help you to get the most from your currency transfer.
This NZD weakness can be mostly attributed to uncertainty surrounding the new coalition government formed between Prime Minister Jacinda Adern and her Labour party, and Deputy Winston Peters with the New Zealand First party.
It was announced yesterday that non-residents will be unable to purchase existing homes in New Zealand in a bid to slow climbing property prices, which is causing a housing affordability crisis.
However, the ban is expected to be implemented by Christmas, and it does not appear to affect the purchasing of new build properties.
The new government has also promised to reform the Reserve Bank Act which could affect the central bank’s monetary policy moving forward, and as such has deterred investors from holding funds in the NZD for fears over the security of their returns.
Another factor to NZD weakness this week was due to poor trade data including a wider than expected Trade deficit, and lower than expected Exports figures released on Wednesday. The New Zealand economy is reliant upon its exports as it makes up almost 38% of the country’s GDP.
Data to watch out for next week includes Building Permits released on Monday evening which shows the number of new construction projects being planned. This is followed by unemployment data released on Tuesday evening, and if either of these releases are worse than expectation, we could see further New Zealand Dollar weakness. Any clients looking to sell NZD in the short term may be wise to move ahead of these announcements to limit any further potential losses.
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